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semiconductor manufacturer

Semiconductor Manufacturer

Operational Efficiency

A Fortune 500 semiconductor manufacturing company had a hypothesis: their value realization could be far greater than it was. They believed that their approach to product innovation had stagnated and their development cycle time and yield was leaving considerable money on the table. In an environment where the time horizon from ideation to go-to-market can stretch anywhere from five to nine years, some of the world’s foremost, cutting-edge engineers had fallen into a pattern of product development that resembled an assembly line. Clock-in. Focus just on your bit to achieve your gate requirements. Let the next person worry about their specs. Clock-out. Rinse, repeat. One senior leader said, “we need to bring the passion of a technologist back to this work.” Leadership believed that they could accelerate their product development, realizing hundreds of millions of dollars of impact, and shift employee mindsets to look more holistically at the entire value chain – not just their employees’ individual roles within the bigger picture.

Kotter partnered with them to help prove out their hypothesis, understanding that they didn’t have months or years to wait to see results. They needed to see the needle move on enhanced value realization in a matter of weeks.

The key elements to drive enhanced value realization were to:

  • Bring together people across the full development cycle to investigate where they could drive dramatic efficiencies (taking months and years off cycle time) across all gates.
  • Increase yield by 10-20% while remedying long-standing quality challenges.
  • Seed a new way of working that, when scaled, could revolutionize operational efficiency across the business.
  • Generate unambiguous, demonstrable results within weeks to justify the continued investment of time and resources.

In just 3-4 weeks, they saw a demonstrable shift in development cycle time and yield, giving them the confidence to continue testing the theory for another 3-4 weeks. In five months’ time, the results were undeniable. Together we had validated that a dramatic shift in the way they approached value realization was not only necessary, but possible – we had proven that it worked. They had been leaving tens of millions of dollars on the table, evidenced by the exponential value that small teams of 10-20 people had driven.

The work was two-fold: accelerate the speed of the development cycles while increasing yield. Speed and quality are often competing forces where one is forsaken for the other – but it doesn’t have to be this way. With one high volume, high-priced product the development cycle time was reduced at one of the most significant gates by 80% – from 80 weeks to 10 weeks. The organization also realized over $25 million in annualized yield savings, directly benefiting the bottom line. Within five months they went from an industry laggard yield to an industry-leading yield on these parts. 

Kotter helped the organization think differently about the full system and the power of the people within it. The organization’s value realization was amplified by bringing in diverse perspectives far earlier in the development process than is commonplace. At critical junctures, they were able to solve predictable and unpredictable challenges about cycle times and solve persistent yield issues that had negatively impacted profitability for years. Instead of behaving in a heads-down, cog-in-a-machine manner, employees began to demonstrate ownership and authorship of the innovations they were taking part in, reenergizing the system as a whole.

5

number of months of transformation work that drove unambiguous results

$25

million in annualized yield savings realized

80%

reduction in cycle time at one critical juncture

$100s

of millions in projected incremental revenue due to faster speed to market time